Turquoise Hill Resources (TRQ) Weak On High Volume

Editor's Note: Any reference to TheStreet Ratings and its underlying recommendation does not reflect the opinion of TheStreet, Inc. or any of its contributors including Jim Cramer.

Trade-Ideas LLC identified Turquoise Hill Resources ( TRQ) as a weak on high relative volume candidate. In addition to specific proprietary factors, Trade-Ideas identified Turquoise Hill Resources as such a stock due to the following factors:

  • TRQ has an average dollar-volume (as measured by average daily share volume multiplied by share price) of $14.4 million.
  • TRQ has traded 375,888 shares today.
  • TRQ is trading at 2.83 times the normal volume for the stock at this time of day.
  • TRQ is trading at a new low 3.17% below yesterday's close.

'Weak on High Relative Volume' stocks are worth watching because major volume moves tend to indicate underlying activity such as material stock news, analyst downgrades, insider selling, selling from 'superinvestors,' or that hedge funds and traders are piling out of a stock ahead of a catalyst. Regardless of the impetus behind the price and volume action, when a stock moves with strength and volume it can indicate the start of a new trend on which early investors can capitalize (or avoid losses by trimming weak positions). In the event of a well-timed trading opportunity, combining technical indicators with fundamental trends and a disciplined trading methodology should help you take the first steps towards investment success.

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More details on TRQ:

Turquoise Hill Resources Ltd., together with its subsidiaries, operates as a mining company. Its principal material mineral resource property is the Oyu Tolgoi copper-gold mine located in the southern Mongolia. The company was formerly known as Ivanhoe Mines Ltd. TRQ has a PE ratio of 4. Currently there are no analysts that rate Turquoise Hill Resources a buy, no analysts rate it a sell, and 2 rate it a hold.

The average volume for Turquoise Hill Resources has been 4.2 million shares per day over the past 30 days. Turquoise Hill has a market cap of $8.9 billion and is part of the basic materials sector and metals & mining industry. Shares are up 42.3% year-to-date as of the close of trading on Wednesday.

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TheStreetRatings.com Analysis:

TheStreet Quant Ratings rates Turquoise Hill Resources as a hold. The company's strengths can be seen in multiple areas, such as its robust revenue growth, largely solid financial position with reasonable debt levels by most measures and solid stock price performance. However, as a counter to these strengths, we find that the growth in the company's earnings per share has not been good.

Highlights from the ratings report include:
  • TRQ's very impressive revenue growth greatly exceeded the industry average of 17.4%. Since the same quarter one year prior, revenues leaped by 276.7%. This growth in revenue appears to have trickled down to the company's bottom line, improving the earnings per share.
  • TRQ's debt-to-equity ratio is very low at 0.00 and is currently below that of the industry average, implying that there has been very successful management of debt levels. Along with this, the company maintains a quick ratio of 2.55, which clearly demonstrates the ability to cover short-term cash needs.
  • The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Metals & Mining industry and the overall market on the basis of return on equity, TURQUOISE HILL RESOURCES LTD has outperformed in comparison with the industry average, but has underperformed when compared to that of the S&P 500.
  • TURQUOISE HILL RESOURCES LTD reported significant earnings per share improvement in the most recent quarter compared to the same quarter a year ago. This company has not demonstrated a clear trend in earnings over the past 2 years, making it difficult to accurately predict earnings for the coming year. During the past fiscal year, TURQUOISE HILL RESOURCES LTD reported lower earnings of $0.10 versus $0.18 in the prior year.

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